Monday, April 12, 2004

Making the middle class pay

Title: The annual American nightmare
Source: The Week
Date: April 16, 2004

From the article:
    The more Byzantine the tax code becomes, the better it is for the wealthy. Between 1995 and 2000, as thousands of pages of tax regulations were added, the 400 richest Americans went from paying 30 cents on the dollar in income taxes to just 22 cents. The reasons for that are simple enough, says New York Times reporter David Cay Johnston, who spent nine years studying the tax system for his book Perfectly Legal. Only the wealthy and corporations have enough money to influence federal lawmakers to write specific exemptions, and to hire the expert attorneys and accountants who know how to lower their taxes to an absolute minimum. A New York tax lawyer, for example, once devised a way for Bill Gates—the richest man in America—to take $200 million in Microsoft stock profits without paying a dime in taxes, even though he theoretically owed $56 million in capital-gains taxes. Dozens of similar loopholes also exist for corporations: Simply by opening a post-office box in Bermuda, Ingersoll-Rand saved itself $40 million in corporate taxes. As the wealthy and corporations exploit the growing number of loopholes, Johnston says, the burden on everyone else necessarily grows.
The concentration of wealth accelerates.


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